Niv
Your motherboard has an integrated GPU. Are you sure you have the monitor plugged into the actual video card (8600GT), not into the motherboard?

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if that was the case he'd have no video output. Also, note that he mentions high FPS that then dips, he'd be low all around on the onboard. His hitching also occurs in 2D, meaning that the video card is most likely unrelated.

So that it doesnt get lost Niv, can you please check the power option i mentioned. A friend recently had a similar problem, although his was in vista - BIOS and windows have options to turn off HDD's after an idle period, and his system was freezing temporarily due to the drives turning on and off.

No such thing either your card is PCI-E compatible or not and it is. The 8200/8600 series aren't exactly the most powerful cards (actually pretty weak) any below average motherboard and PSU should "handle" it well.

I think your PC dealer is making excuses Windows XP Media Center is a good operating system, maybe not the best for gaming but it wouldn't pose you any problems. If your within warranty have your dealer replace the system free of charge.

sorry it's a typo not e-GeForce8200 GT but this is what I hav instead for video card e-GeForce8600 GT

checked power contorl. it says "never".

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well for once i am going to admit defeat. I seriously have no idea what could be causing this. if you do solve it, please make sure to let us know - its not often i get totally stumped, and i'd really like to know what to do if i run into this again.

9400m/9600mGT 256MB - almost always using 9400m due to heat and battery

Hard Disk(s):

Corsair Nova V64 - only need 30GB for my install

Optical Drive:

There's one, just don't know when I last used it!

LCD/CRT Model:

1440x900 15" MBP screen + 1680x1050 20" Dell TFT

Case:

Crumpler Dark Side to protect the MBP

Sound Card:

Crappy stock on-board one

Power Supply:

Big battery and small power brick

Software:

OS X SL, Chrome, Eclipse, Parallels, VS 2010 EE

I can't think of any suggestions, that haven't been given already.
This really is confusing, but I would like to say (I might have missed someone else saying it, sorry if I did), SYSTEM and SYSTEM IDLE PROCESS shouldn't worry you, they'll spike up when needed.http://www.neuber.com/taskmanager/process/system .html
There's nothing to worry about there.

Somke motherboards react differently with on-board and discrete graphics boards, so if the on-board IS enabled, it may be taking precedence over the discrete. Really just double-check the connections to the card, and the BIOS, to make sure it's disabled.
Might be worth checking out GPU-Z as well, give us the clock speeds it's running (who knows, may be underclocked for some reason), and jsut as a double-check it's running off the 8600.
Oh, and it wouldn't necesarilly be running slow off the on-board. Certainly would account for the lagging though, since the 7050 shares system RAM, so maybe it's accessing it, and slowing the computer. Although with 4Gigs, that may not be the case.

Isn't there a way for his RAM to be fully accessible? Thought there were options built-in that would allow the computer to recognise all of the RAM.

well thanks for the tons of input. What I will do tomorrow/today (5:00am right now) is I will call the shop keeper to let him know of the problem, and I will send the machine in asking for a better mother board in exchage for the trouble he has caused me and the old piece of crap motherboard (brand new but still crap)

Ripper3, I'm a computer idiot, this is my first Desktop ever owned, used and purchased in my life. I don't know half the things you are talking about there. If you wouldn't mind can you explain those in layman's term so that I can understand or at least know what to do to perform the things you're talking about?

Lastly, can you guys give me some inputs on how good a deal it is for this desktop, if it's priced at 930 and purchased at 850 CDN? (purchased 1 month + 1 week ago) Thanks, any opinions are great, don't worry about making me feel bad for buying crap at ripped off prices.

9400m/9600mGT 256MB - almost always using 9400m due to heat and battery

Hard Disk(s):

Corsair Nova V64 - only need 30GB for my install

Optical Drive:

There's one, just don't know when I last used it!

LCD/CRT Model:

1440x900 15" MBP screen + 1680x1050 20" Dell TFT

Case:

Crumpler Dark Side to protect the MBP

Sound Card:

Crappy stock on-board one

Power Supply:

Big battery and small power brick

Software:

OS X SL, Chrome, Eclipse, Parallels, VS 2010 EE

Sorry, my posts are normally a bunch of crap mixed together, and replying to different posts at different times.

Your system has discrete and on-board graphics, so it's got the GeForce 7050, which explains the drivers on the disc, and it has the 8600GT as discrete.
If the on-board graphics are enabled in the motherboard's BIOS, and you have the monitor plugged into the motherboard's video output, then the system could be using the on-board instead of the discrete. http://www.asus.com/products.aspx?modelmenu=1&model=1841&l1=3&l2=101&l3=567&l4=0
Check the picture near the bottom of that link, labelled Back Panel I/O Ports. If the monitor is plugged into the blue or white connector there, then it's connected to the wrong ports (again, sorry if you've tried this and I missed it).
If it is, then change the connector. The ones for the 8600 will be lower down on the back of the case, since it's a tower.

Linky for GPU-Zhttp://www.techpowerup.com/gpuz/
Just run it, and see what it shows up. If it displays information about the Geforce 7050, it's running on-board graphics for sure.
Oh and while at it, run a game, it has a temperature readout in the program, and should show the temperature of your graphics card.

9400m/9600mGT 256MB - almost always using 9400m due to heat and battery

Hard Disk(s):

Corsair Nova V64 - only need 30GB for my install

Optical Drive:

There's one, just don't know when I last used it!

LCD/CRT Model:

1440x900 15" MBP screen + 1680x1050 20" Dell TFT

Case:

Crumpler Dark Side to protect the MBP

Sound Card:

Crappy stock on-board one

Power Supply:

Big battery and small power brick

Software:

OS X SL, Chrome, Eclipse, Parallels, VS 2010 EE

That's fine, it's using the 8600GT, and the temperatures are safe.
That is peculiar, when Caesar IV dips in CPU usage.
System Idle process is fine though, it's just showing the amount of CPU time that's not currently in use, so it seems the game just suddenly stops for some reason.

9400m/9600mGT 256MB - almost always using 9400m due to heat and battery

Hard Disk(s):

Corsair Nova V64 - only need 30GB for my install

Optical Drive:

There's one, just don't know when I last used it!

LCD/CRT Model:

1440x900 15" MBP screen + 1680x1050 20" Dell TFT

Case:

Crumpler Dark Side to protect the MBP

Sound Card:

Crappy stock on-board one

Power Supply:

Big battery and small power brick

Software:

OS X SL, Chrome, Eclipse, Parallels, VS 2010 EE

True, almost forgot about that, but since you had Caesar IV open, tried to find info about problems involving Caesar.

I almost get the feeling that the OS might be the problem. Can MCE2002 be updated to 2005, or are they too different, and require different licenses?
I'd say, if you take it back to them, ask for a different OS, even if it's just for testing, I'd ask for plain old XP Home/Pro. See if the problems go away.

True, almost forgot about that, but since you had Caesar IV open, tried to find info about problems involving Caesar.

I almost get the feeling that the OS might be the problem. Can MCE2002 be updated to 2005, or are they too different, and require different licenses?
I'd say, if you take it back to them, ask for a different OS, even if it's just for testing, I'd ask for plain old XP Home/Pro. See if the problems go away.

9400m/9600mGT 256MB - almost always using 9400m due to heat and battery

Hard Disk(s):

Corsair Nova V64 - only need 30GB for my install

Optical Drive:

There's one, just don't know when I last used it!

LCD/CRT Model:

1440x900 15" MBP screen + 1680x1050 20" Dell TFT

Case:

Crumpler Dark Side to protect the MBP

Sound Card:

Crappy stock on-board one

Power Supply:

Big battery and small power brick

Software:

OS X SL, Chrome, Eclipse, Parallels, VS 2010 EE

Woops sorry. My mistake, then.

It is peculiar. I guess you should probably just take it back, and see what they tell you. And if they say they can't find a fault, I'd force them to try again, and show them the game performance, since they may sometimes not find anything wrong with it, or do, and try to pass it off as working.

9400m/9600mGT 256MB - almost always using 9400m due to heat and battery

Hard Disk(s):

Corsair Nova V64 - only need 30GB for my install

Optical Drive:

There's one, just don't know when I last used it!

LCD/CRT Model:

1440x900 15" MBP screen + 1680x1050 20" Dell TFT

Case:

Crumpler Dark Side to protect the MBP

Sound Card:

Crappy stock on-board one

Power Supply:

Big battery and small power brick

Software:

OS X SL, Chrome, Eclipse, Parallels, VS 2010 EE

The 8600 series isn't THAT poor. My GTS could handle pretty much anything I threw at it, so think before you immediately put something down.
Meanwhile, Caesar IV wouldn't slow it down to that effect, it would be getting a consistently low FPS if that was the case, but it jsut freezes and lags every few seconds, that suggests a completely different problem.

let this run for a while, while your playing things, watch for it to slow down then get outa the game and look in it, in the little graphs, these graphs to the right of each process show each processes cpu useage history, im hopeing you can figure out what to do from here

just a thought, and not sure if it's been mentioned as I just skimmed over this thread . . .

but have you turned off WIN self-defragging and HDD indexing? Both XP and Vista are set at default to defrag the hard drives, and index the files and folders when the HDDs are at an idle state, and WIN doesn't seem to pay if you're playing a game or using some other application.

Another thought - what kind of FPS are we talking about here, you could use FRAPS program to monitor FPS in-game. I'm kind getting the feeling, though, the slowness you're speaking of is really just loading stutter (seeing as how you say games run fast, then really slow, and then fast again). You could try to reduce in game details just a bit (like lower texture quality or something), and see if improves the slowness issue at all.